Niki Arinze's Step On To Wall Street!

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

2010-06-18T21:18:00.005+01:00

Market Pulse

The opening range for June has been well established. So far in the month of June, the S&P 500 has penetrated the lows of June 1st and has catapulted above the June 3rd high. It seems for now that the month of June is going to make it hard to determine the direction of market in the short term. The long term is more tricky. It has been clear to me since August of 2009 that the market needed to correct at some point. The real question is: "How big of a correction is it going to be?" The bulls and bears have been grappling with that question. The bulls believe that the market was due for a correction and that the market's decline will be rather constructive in order to set the market up for higher prices. The bears believe the decline is the start of something bigger and that the peak in late April could be "All She Wrote". In my opinion, there is no evidence to give credence to the bull case because it doesn't pay to be complacent in the face of an obvious decline in the market. The bears on the other hand may have something to take note of because the viciousness of the decline in such a short period of time doesn't completely lend itself to the idea that the market is experiencing a normal and constructive correction. I am not completely buying the bearish case, but I am open to the opinion that the market's rally from the March 2009 lows is over. The only opinion that really matters is the markets’ opinion. I think we will have to wait and see further market action to determine what the longer term trend of the market will be.

Weekly Wrap: Your source for stock, stock market, and stocks info

2010-03-08T11:10:00.001Z

Weekly Wrap

Last week was positive for worldwide markets. The majority of worldwide markets closed up for the week. The FTSE 100 actually made a new closing high since the March 2009 lows. Other indexes like the DJIA, S&P500, NASDAQ, and the Bovespa are not too far away from making new highs as well. The evidence at this stage points to markets moving higher. The markets themselves are not giving off any bearish signals. The sharp plunge that started in January looked as if it may have been the start of something more, but February action completely took that bearish scenario off the table. The only problem is that many of the stocks that are outperforming in this rally are not having long enough consolidation periods (my opinion) to make initial entries with a high degree of confidence. I feel at any point this market could turn down, but a rally that has lasted for 12 months is clearly more than just a bear market rally. Something else is going on here, and I am not quite sure what it is. Can the market really continue going up at the pace it is? Can the stock market completely divorce from the real economy, which are in shambles in all the developed economies? Is all the negativity and pessimism overdone and a new bull market has begun, stealthily? My experience tells me that all markets correct SOONER or LATER, and this market is no different than any other. The highly anticipated employment report came out on Friday. It was better than expected. It’s getting difficult to tell reality from fiction these days. The housing market is not recovering, contrary to what any tv pundit will tell you. Informed individuals were saying that commercial real estate was the next shoe to drop 2 years ago. It seems as though it may be time for commercial real estate to take center stage in the headlines.

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

2010-03-05T11:34:00.002Z

Market Pulse

The opening range for March has seen three positive days. Yesterday, the market closed up slightly (+4.18 pts). The market is still in a confirmed uptrend from the March 2009 lows. Each and every decline in the market is met with buyers coming in to lift the market higher. Although, at this stage in the advance (we are very close to a full 12 months) it is very interesting to note that it seems that the market continues to rise without the concurrent volume expansion you would see in a sustained bull market. There are some individual stocks that continue to outperform in this current rally (e.g. VPRT, VCI, DBRN, RDWR, and LZ; to name a few). In the market there are always opportunities to profit every single day. Even when the market goes down, there are stocks going up. And when the market is going up, there are stocks going down. Staying vigilant and sharpening your focus on a particular stock and getting to know its character can give you the edge you need to know when to make an investment commitment.

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

2010-02-28T13:38:00.001Z

Market Pulse

The market is in a holding pattern right now. February didn’t tell us much about what direction the market may move in. So far, the February low is holding, although the volume on the rally is pretty flat. Last Thursday’s reversal was strong evidence of a bullish case that the market is going to move higher. The high volume at the February low may have been a significant sign that the market has support.

Weekly Wrap: Your source for stock, stock market, and stocks info

2010-02-28T12:55:00.003Z

Weekly Wrap

The market was pretty much unchanged for the week. There were some sharp moves. The S&P 500 plunged on Tuesday and Thursday mornings only to comeback immediately. That type of action is very strange to say the least. The market is unable to sustain a measurable move downward. It seems every time the market seems it could be starting a decline, a bid comes back underneath the market and it magically comes back at the end of the day. The longer term trend of the market remains up, although we may be in a shorter term correction. Some of the market pundits that I listen to like Marc Faber, Jim Rogers, Bob Prechter, Peter Schiff, etc. have differing views but ultimately they see mistakes being made by authorities, unsustainable markets, and a financial reckoning in the future. To me these things haven’t started to happen yet. We experienced the initial decline in 2008 and we are in the rebound period. Since the March lows, markets worldwide have come well off their lows. Now, it seems like we are hovering but really with nowhere to go. The consumer confidence report was released on Tuesday and it was disappointing. It shouldn’t be a surprise to anyone who has been looking around in their local communities. The economy is not recovering and the below average figure of 46 is reflecting the social mood. A new month is starting for the markets next week. February was essentially a sideways month. I thought that the burgeoning decline that started in January would carry over into February, but the market reversed course and went higher. The opening range for February gave no clues to the direction of the market. The opening range of March may be a little more helpful in determining the next move. We’ll just have to wait and see how the beginning of this week pans out. I don’t have any idea which way the market could go because I can see the market A) going higher, B) start plunging, or C) continue moving up and down with no trend. None of those outcomes would surprise me.

Economic Statistics & Data: Your source for stock, stock market, economy, economic statistics and data info

2010-02-21T00:32:00.025Z

ECONOMIC STATISTICS AND DATA

Current Growth rate, U.S. GDP: 5.7%

10-Year Yield: 3.77%

PRIME INTEREST RATE ON LOANS:3.25%

FEDERAL FUNDS RATE: 0.25%

Private-owned housing starts:

591 thousand units (+2.7% vs. Dec '09)

Single-family housing starts:

484 thousand units (+1.5% vs. Dec '09)

TAX RATES:

CORPORATE INCOME TAX RATE: 35%

Indiv. Rate on Ordinary Income: 15% ($8,375-$34,000) 25% ($34,000-$82,400) 28% ($82,400-$171,850) 33% ($171,850-$373,650) 35% ($373,650+)

Indiv. Rate on Capital Gains: 15%

CRUDE OIL PRICE PER BARREL: $79.81 +1.01

DOW JONES STOCK INDEX: 10,402.35 +9.45

S&P 500 STOCK INDEX: 1109.17 +2.42

NASDAQ COMPOSITE INDEX: 2243.87 +2.16

NYSE COMPOSITE INDEX: 7083.25 +2.87

NATIONAL DEBT: ($12,396) trillion

Weekly Wrap: Your source for stock, stock market, and stocks info

2010-02-20T17:39:00.002Z

Weekly Wrap:

Stocks made an impressive move for the week. The S&P 500 finished up 2.85% for the week. I said in previous blog posts that I didn’t expect the market to break above the February 2^nd highs. Well, all the major indexes and some of the international benchmarks (e.g. FTSE, Bovespa, Straits, etc.) broke above the high for the month as well. Stocks went up every single day, and are now on a nine-day run upwards from two Fridays ago. The breakout out to the upside clearly signals that the market may have the potential to rise higher and even rally to new highs. Last week was pretty lackluster on the news front except for the FOMC meeting and the Fed’s decision to raise rates. I tend to watch markets (i.e. looking on my screens) rather than read news or keep up with financial events. So when I found out that the Fed had raised by 0.25%, I was surprised that it must have had no effect on the market because I would have noticed it. When I see a big move up or down in the markets, I usually check Bloomberg to see what the news is. And it’s usually Fed minutes, non-farm payrolls, jobless claims, manufacturing data, or consumer sentiment that can cause sharp swings. It was a pretty boring week. I think that most stocks went up in general. If you were overly bearish coming into the week, you probably got killed because stocks moved higher all week. The market never seems to amaze me these days. Can the worldwide markets continue to move higher month after month? We'll see.

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

2010-02-16T23:31:00.002Z

Market Pulse:

The first day of this shortened week has started off bullishly. The S&P 500 rose 19.36 points (+1.80%) which pushed it back into the opening range for February. I said two weeks ago that the February 2^nd highs shouldn’t be surpassed if we are going to have a sustained decline in the market. Today’s bounce will put that forecast in jeopardy if the market keeps rallying. One thing about today’s move was the real lack of volume behind it on the upside. It may be something or it may be nothing. Today’s markets aren’t like the market 30 years ago. You can’t completely really trust the volume you are seeing today. We have got program trading, flash trading, dark pools, etc. which cloud what is really happening in the market. So, from what the chart shows, I have to conclude that today’s volume was weak. There were a lot of big moves in individual stocks in the market which is positive. The only thing to do is wait to see if the market can really follow through strongly with the rally. Ideally, you want to see an up day on higher volume to give some support to the rally.

Commerce & Law: your source for into about commerce, commercial law, admiralty/maritime law, statutory law, and natural rights

2010-02-15T12:26:00.004Z

AMENDMENT I.

Congress shall make no law respecting an establishment of

religion, or prohibiting the free exercise thereof; or abridging

the freedom of speech, or of the press; or the right of the

people peaceably to assemble, and to petition the Government for

a redress of grievances.

Weekly Wrap: Your source for stock, stock market, and stocks info

2010-02-15T12:08:00.003Z

Weekly Wrap

As you can see from the weekly chart, this week’s action was pretty choppy. The market closed higher for the week, but barely. It isn’t the type of week you would want to see if you think the February 5^th intraday lows are going to hold. The market’s up and down motion for the week have a corrective type of pattern rather than an impulse pattern. I think the February 5^th lows will probably be broken and the market is headed for further losses. Using the opening range of the month as a basis, the forecast for a decline in February is still valid. The bottom line is: Don’t go out buying stocks now, because the chances are high that they will move lower. I like buying stocks that are moving down, but I like to make sure they are getting close to making sustainable lows (whether it’s in the short-term or long-term). Right now, I don’t think we are close to a short-term (3-4 weeks) or long-term (1-2 years) low in the market. It seemed that Greece was the big story over the last week. Their debt problems are in full spotlight and everybody is talking about the repercussions if they default. The course that governments have taken around the world should tell us how that situation will be resolved. Greece will be bailed out and their crisis will be forgotten in a year. It was only a year and a few months ago that the US investment banks and money center banks were in the spotlight. Those banks have not fixed any of the problems they had. They have only concealed them. Greece is a symptom of a larger problem within the global economic system. At some point credit expansion becomes a hindrance rather than an engine for growth. The ability to service the debt becomes a problem when a large portion of your outgoings are going to pay off creditors. The consequence of these rescues, bailouts, and irresponsible lending will be felt one way or the other. It will be interesting to see how it turns out. Well, the US has a new stimulus bill being introduced to rejuvenate the economy. The question has to be asked, “How many stimuli do you need to get the economy going?” That raises a second question, “How many stimuli do you need to do before you realize it isn’t working?” Someone should ask the people working in both chambers of the House and the head of the Executive branch of the US. In other news, there are some provisions that are trying to be slipped into the 3^rd proposed stimulus bill without anyone asking any question according to this Bloomberg article. So, are people coming out of their shells and starting to spend again? The Advance Retail Sales report for January was positive. It was up 0.5%. The consensus was 0.3%, so it beat the estimates. You can probably get an accurate picture of consumer demand by asking your friends and neighbors if they are shopping. An even better way is to look at your own spending habits. If you are spending less money on shopping than two years ago, you can imagine what everybody else is doing in an economy where unemployment is 9%+. Speaking of the economy, last week the GDP for Europe (i.e. Eurozone) was 0.1%. 0.1% is not growth. It’s standing still. Although, most of the pundits are saying that a global recovery is taking place, I don’t think 0.1% adds much credence to their claims. Despite the recent pull back in the market since mid-January there are still some stocks making new highs from the March lows. I don’t advocate buying stocks hitting new highs. It’s just my preference not to buy at peaks, and to wait for the inevitable pullbacks. Stocks making new highs are certainly candidates for putting on a watch list. Just a few names on that potential watch list are VRX, LCC, UTI, UVV, TSN, SNS, SLE, ROK, RSC, RMD, RBC, PLT, PIR, PBT, NVO, LII, IDT, EMS, DLB, CEL, BRK.A, and ACF. Keep in mind that these stocks are in the middle of big moves, and the meat of it might be gone.

Chart Perusal: Your source for charts on the stock market and economy

2010-02-12T11:51:00.006Z

Workweeks from Across the World

Systems Trading Ideas: Your source for system trading, trading system, systems trading, or stock trading system ideas

2010-02-12T11:33:00.002Z

Trade Your Beliefs

There is a myriad of ways to invest and trade in the stock market. Principally, there are two schools of thought when it comes to investing and trading. The two schools are Fundamental Analysis and Technical Analysis. No matter which school you subscribe to, it is important that you develop a perceptual filter (i.e. a fundamental approach or technical approach) that matches your personality and your beliefs. You must invest using a methodology or a system that you believe in first and foremost. If you don’t, you will not be successful. You will be jumping from system to system in an attempt to find a holy grail that will make you money. The fact is there is no holy grail for making money. There is no magic system that will work all the time. It takes some time to develop your beliefs about the market and then to try to figure a way to trade or invest in the market using your beliefs. The practice that comes from trading or investing in what your beliefs are will start to build an intuitive feel inside you for market activity. That experience will give you the edge you need to be successful. One of the first things you must do before you trade or invest is examine your own beliefs about the market. If you don’t believe that anyone can make money in the markets, then you should give up trading altogether. If you believe that only the big hedge funds and banks control the market and have the inside information, then the system or methodology you develop should be based on trying to figure out what the hedge funds or banks are doing. If you think following the crowd is a bad way to find good investments or trades (i.e. herding or group think), then you must develop a system based on finding opportunities away from what everyone else is thinking about. So you can see by examining what you believe about the markets, it is possible to come up with a system that has the potential to be successful. The reason for its potential success stems from the fact it’s coming from your own mind. You could be the only person in the world with that system and that may be the reason it works.

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

2010-02-11T10:57:00.003Z

Market Pulse

Yesterday was really slow. Not much going on in the markets. We have got a lot of markets that are potentially on the cusp of changing direction. The gold market is experiencing a correction. There is an overwhelming majority of gold bugs who see any pull back in gold as a buying opportunity. They also don’t see any chance of gold actually having a sustained trend down because of all the monetary and fiscal irresponsibility of governments around the world. I don’t disagree with their thesis but when gold was steam-rolling up to $1200 I had to force myself not to buy it. It seemed like gold was acting like a stock that was racing up and I hate buying stocks that are making all-time highs. So, I won’t buy gold like that either. Some trend followers like doing that. They always say, ”Buy new highs, and sell new lows”. I can’t figure out how their mind can deal with potentially being the last guy on board the train. I also wonder where they put there stop. So, if they are any trend followers who trade like that. Let me know how you do it. The U.S. dollar also looks like it has the potential to rise much higher. In the October-December period of 2009, it looked really bad for the US dollar. I was wondering if it may be the start of the collapse, but the dollar has rebounded sharply against most other currencies. It sounds ludicrous to suggest that the US dollar can go higher, but charts don’t lie. The dollar is being bought and support by some major players. The commodities (e.g. copper, oil, platinum) are pulling back. I don’t know what to make of that. For example, oil has declined and is close to breaking the December 14^th lows. My instinct tells me that they will probably be broken, which means lower prices for crude oil. But at some point crude oil has value because it’s needed by everyone. The S&P500 has taken a break from falling for the last few days, but there isn’t any real volume on the bounce. For the rally to continue, some much needed new buying should come into the market. Keep on the lookout for any more big down bars on the S&P500. If we start to see more big down days piling up, we might be discussing a return of the bear market.

Learn to invest: Your source for investment or investments, stock, stock market, and stocks info

2010-02-11T10:25:00.007Z

Selecting the Right Industry Group

There is something to be said about investing in the right industry. When you are investing, you want to make sure that you are in an industry group that is leading the market. Similar stocks within a group tend to move together. If you take a look at the stocks within the Metal-Ores group (e.g. CCJ, BBL, VALE, CLF, RTP, FCX), the majority of the patterns you see will be similar. This group peaked in late 2007 or early 2008 and then they all plunged into the October or March lows. Since that time, some have risen faster than others but again they are all moving with each other. This is how stocks in the same industry group tend to move. Your job is to try to find out the leading industry groups, and then pick the leading stock within that group. How do you find the leading industry group? No one is going to tell you prior which group is going to lead the market higher before it happens. This is where your own homework comes in. You’ve got to read up on industries. Go to financial websites and read the articles. You will start to get a feel of which industries are hot at the moment. Typically, when the mainstream media starts hyping up an industry the party is usually over. But that isn’t always the case. You have to ask yourself if that particular industry group’s success can continue. Is it a sustainable growth period? Is the industry experiencing secular growth or cyclical growth? Is the industry ascending or descending as a percentage of the economy? These are all ways to find the hot industry group. I am now going to plug Investor’s Business Daily because I think it’s a great business source of information for individual investor/traders. They have a section within the newspaper that tells you which industry group is leading the market every day. So, they do the homework for you. You can spend your time investigating leading industries rather than trying to find out the leading industries.

Money, Credit and the Federal Reserve: Your source of info on banks, credit, Federal Reserve, and money

2010-02-11T00:17:00.004Z

Weekly Wrap: Your source for stock, stock market, and stocks info

2010-02-08T15:49:00.007Z

Weekly Wrap: The market experienced a major sell-off on Thursday. It was quite interesting to see a day like that because the market hasn’t had a day like that since 2008. The market plunged all the way into the Thursday’s close and finished at the absolute lows. I think that’s a rather negative and bearish sign. Meanwhile, though, the pundits still think that it’s a little pullback. If the markets keep moving lower, I wonder what they will say then. Toyota stock price has fallen to pieces in the last 3 weeks. I didn’t realize how emotional the reaction to the recall news would be. As Wikipedia states, ”The Chinese word for "crisis" is frequently invoked in motivational speaking along with the fallacious statement that the two characters it is composed of represent "danger" and (supposedly) "opportunity." Who knows whether the motivational speakers are just making it up, but it sounds good. The fact of the matter is that there is opportunity in the current Toyota crisis. I don’t think this is the end of Toyota by any means, and right now the heat is on them. But in a year or two people will forget about the whole thing when they fix the problems with their cars. In the meantime, I would look at potentially buying Toyota because it seems as though some large funds are dumping it. Let’s not forget the automotive industry itself is in bad shape. But I feel that Toyota is still one of the best car makers in the world and every company makes mistakes and goes through difficult periods. Perhaps this is Toyota’s time right now. From a technical standpoint, the heavy volume (indicating activity from larger players) is interesting to me. If you start to see big down days on heavy volume, but price closes at the top that would be a very obvious sign that “big money” is supporting the stock, not dumping it. The only thing to do would be to wait patiently for those signs. The unemployment picture in the US is starting to get almost comical for the standpoint that the numbers don’t quite make any sense sometimes. There were 20,000 jobs lost in January but unemployment went down. So, essentially more people lost jobs, but the official unemployment figure shows that people actually got jobs. Let’s just say it’s still bad, whether is 9.7% or 10.5%, it’s still too high and not encouraging. The market staged a big reversal on Friday. Take a look at the candle of Friday and you will see a strong reversal bar. Some sources say that the market bounced because from the July lows to the January peak, the decline was a Fibonacci retracement level. For the market to continue rising, we would need to see confirmation that the rally will continue with a higher volume up day. I really have no idea how this upcoming week might go, but I expect February to be down based on the big down days we have had in the last 3 weeks.

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

2010-02-04T20:33:00.006Z

Market Pulse: I was very interested in seeing how the first 3 days of the month would pan out for the markets. I have been a staunch bear since early January 2008, although being long the majority of 2009. I turned heavily bearish again around October and was quite stunned at the market’s ability to levitate even in the face of suspect (at least!) economic numbers, a poor housing market, and the consumer’s unwillingness to borrow (and the banks unwillingness to lend). So, my forecast for 2009, was that we would have a big rally. That rally would get everyone’s hopes up and optimism would return. The economic reality would hit in late 2009 (sometime in the fall) that the economy was not recovering as planned, and the markets would tumble again breaking the March lows of 2009. That break of the lows would provide a final washout of all the bullish investors, and we would potentially see a climactic low or an event driven low in the market. That low would probably be the nominal low in the markets for the next 20-30 years at least. That scenario did not quite play out. The market continued to advance through Oct. 2009-Jan 2010 and it was unrelenting (not even pullback more than 6%). Now, the market is showing its first real signs of cracking, and I am wondering if the this decline I was waiting for all those months. It remains to be seen, but I can say that January 2010 was a down month. Typically, how these bears markets go, you get 3 or 4 down months, followed by 1 or 2 up months, then 3 or 4 down months again, then 1 or 3 up months, and then a final 3 or 4 down months. Then it’s over. The lows are in and you can make quite a substantial amount of money if you get in at the lows. This bear market (I still think we are in) has been nothing other than abnormal. From the market peak in October 2007, the bear market was advancing in a typical fashion (as described above). But from the March lows, instead of rallying 1-3 months, the markets have gone up 9 out of 11 months, which just doesn’t happen in bear markets. So it made me think something else was going on here, and I just don’t know what that is because I have never seen anything like it. The type of advance we have seen from the March lows would usually signal the start of a new bull market. If that is the case, why is it that I feel 0% confidence that there won’t be some kind of ANOTHER market catastrophe or collapse. Blame it on social mood or whatever you want, but I wouldn’t want to be caught long at the beginning of 2010 and feel like 2010 is going to be exactly like 2009. Today, the market is getting crushed. This is the type of market action you get when you don’t have any kind of meaningful correction for 10 months. The market’s unabated rise was unhealthy and now we are seeing the consequences of that. I don’t know if it’s going continue for several months and recover, or if this is the top of the bear market rally I envisioned. If it is the top of the rally, then without a doubt the month of February should end lower. Period. Stocks should sell off the rest of the month and not surpass the February 2nd highs. Then we can sit back and see how March turns out.

Money, Credit and the Federal Reserve: Your source of info on banks, credit, Federal Reserve, and money

2010-02-03T10:22:00.007Z

A very good simple explanation of what was going on at the Fed and the major financial institutions receiving bailout money.

Stock Focus

2010-02-01T12:35:00.003Z

Stock Focus: I did a stock screen to find the companies who had risen the most from the March Lows. I am talking about the absolute best performers from the bottom. Surprisingly or not surprisingly, depending on your view, the best performers come from the absolute worst industries. It has been a dash for trash. One stock in particular is among the best performers. It is up 5,000%! Wow. Dan Holding Corp. (DAN) rallied from 19 cents to its Friday close last week of $10.31. It is in the automotive/truck equipment group which is a horrible group to be in because they are tied directly to the big carmakers, but the stock has vaulted off the lows. Maybe some of the larger players see something there, so it’s worth taking a look at. I think it’s a speculative play but some of the best performing stocks were penny stocks at one time. (e.g. Guess, it went down to below $2 twice in the late 90s and early 00s before skyrocketing up). I personally don’t think the future prospects are all that good for DAN, but things change. So it’s one that I will be keeping an eye on.

Learn To Trade: Your source for investment or investments, stock, stock market, and stocks info

2010-02-01T11:43:00.002Z

Learn to Trade: In London, I was speaking to Tom Hougaard, a professional trader, at a seminar in October about trading. He told me that one of the hardest things to do is to add to a winning position. But when he learned how to do this and go against his natural instinct, It allowed him to profit handsomely in his winning trades. Essentially, I am talking about what Is called “pyramiding” or “adding to” a winning position. I myself am not a particular proponent of this method. I think the strategy definitely has some pros, but the cons are what I don’t like about it. Pyramiding a stocks upwards can be extremely profitable IF the stock continues in an uptrend. Where things get tricky is if the desired uptrend fails or the stock is whipsawed up and down and you are taken out of the position because of a stop order that is too close. My gut instinct tells me to follow the advice of legendary trader, Jesse Livermore, who says, ”Pyramiding is a dangerous activity and anyone who tries it must be very agile and experienced, for the further a stock gets extended in its rise or decline the more dangerous the situation becomes. I tried to restrict any serious pyramiding to the beginning of the move. I found it not wise to enter a pyramiding action if the stock was far from the base.”

Weekly Wrap: Your source for stock, stock market, and stocks info

2010-01-30T20:41:00.002Z

Weekly Wrap: Another down week? It can’t be---well---it is. Stocks got bashed this week across the board. If you take a glance at the chart for the week, you’ll notice that every rally was sold. The sell-offs were particularly steep which could mean that a real change in character in the market is occurring. Thursday and Friday weren’t pretty in particular. Friday sell-off was not a surprise to people who don’t drink government Kool-Aid. The big news at the end of the week was the GDP number. This number was reported at 5.7%. That means the US government said the economy was expanding at 5.7%, which is actually a wondrous number to report. For an economy the size of the US, 3% growth is considered good. 4% is very good. So the number comes out and it’s 5.7%. That should have given the bulls all the momentum the needed to take stocks higher. The problem is that the number is completely bogus and the market actually sold-off on a supposedly bullish number. Doesn’t inspire a whole lot of confidence when the market plunges on “good news”. You can’t believe anything that comes out of the government statistics and here is why. Last quarter the government reported 3.5% growth in the US which was above economists’ estimates. Then a month later they said, “Well actually it was 2.8%”. Then after that it was revised to 2.2%. So the real GDP growth in the previous quarter was 2.2%. You take out the tax credit for first time home buyers and the cash for clunkers and it was probably negative. Which would mean the US economy would still be in recession. So, it doesn’t do anyone any good to pay attention to anything the government says. The market is much smarter than the government or anyone else. The market has gone down for two weeks straight and it may be giving us a clue to its next potential trend. Let’s talk about Greece and the Eurozone economies. Anyone remember Argentina’s or Russia’s debt problems? You may have the same scenario playing out in Greece. Credit spreads are widening in those developed nations and the endgame isn’t pretty. Greece’s budget deficit is 12.7% of their entire GDP. That means 12.7% of their income is going to pay the creditors. Portugal, Spain, and France are all seeing their creditworthiness get questioned as well. Yeah, this sounds like a global “recovery” to me. I don’t think so. The politicians and central banks don’t get it. You can’t solve a debt crisis with more debt. You will have to pay the bill when it comes. Discharging the debt is just like paying the minimum balance on a credit card. The credit card company keeps charging you more and more each month. Your credit balance keeps growing. They are actually happy that you only pay the minimum because the means they will make more money off of you. The creditors of Greece, Spain, France, and Portugal will cripple the Eurozone economies because those countries debt payments will be so large that all the money collected will go to paying off debt. This is another one of those developing crises. Ben Bernanke was reappointed. Not a surprise. I am not going to say much on that. I think it was a bad choice and it won’t be realized how bad a choice it was until down the road. The Fed also decided to keep rates at 0%. Again, not a surprise. The Federal Reserve does not control interest rates. Everybody just thinks they do. The Federal Reserve follows market rates, and if the bond market is asking for no return in order for safety it should make you wonder how healthy the economy actually is. Boeing hit a new intraday high Friday from the March lows, and Tesla Motors has filed for an IPO. It is the first US car IPO since 1956. Oh yeah, the iPAD came out too! (Not gettin’ it.)

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

2010-01-28T14:12:00.003Z

Market Pulse: After last week’s end of the week sell-off, the market has done nothing this week. I heard all types of prognostications that Obama’s cracking down on the banks was going to have significant ramifications on the market on Monday morning. Yawn! The market isn’t really interested in much of anything. The market is clearly trading below the opening range of the month. A sign that is to be noted because we haven’t had a close for the month beneath the low of the opening range since June. So I’ll be watch to see if January turns out to be a significant top. There are only 2 more trading days left in the month, so it’s unlikely that the market will rally and close above. That will make it only the 2^nd time since the March lows that the S&P500 finished down for the month. That would make 9 out of 11 months closing up since March. How many more months can the S&P500 close up without a significant correction? If I knew that I wouldn’t be talking to you, I would be out putting positions on. It will be interesting to see. The pundits are all looking at the recent correction and saying that is just a “little pull back”, “nothing to worry about”, “a little correction was overdue”, and other things like that. Nobody thinks it’s strange that the market is up 9 out 11 months, and that a more significant correction might be around the corner. The first 3 days of February might just hold a clue to how February is going to be. This month is done, stick a fork in it. I don’t think anything interesting is going to happen in the next two days. (I could be wrong though. You always have to consider the unexpected when dealing in the markets. You have to be prepared for a crash, pretty much every day, it seems like.) Netflix, NFLX, shot up yesterday (after hours) something like 19%. Damn, I was trying to get in there. Take a look at the charts of Blockbuster (BBI) and Netflix (NFLX) and tell me who you think is winning in that space. Prettty much a no brainer. It was coming down, just how I liked it too. I will have to rethink my entry strategy on that one. Also, I read an article about Panera Bread (PNRA) this morning. Seems like the company is doing really well despite the depression. Got my eyes on them too.

Systems Trading Ideas

2010-01-28T13:42:00.000Z

Systems Trading Ideas: When it comes to designing a trading system, it is very important to think about entries and figuring out the best time to pounce on an opportunity. BUT… most of your attention should be focused on EXITS. Why? Because that’s what makes you the money. There are many systems out there that focus on getting in, but leave little to be desired when focusing on getting out. They do this because most people think entry (i.e. buying at the right time) is the key to a system being successful and making money. You buy a stock at the right time and then you hold it and watch the stock appreciate. In other words, the buy-and-hold strategy that wall street teaches us. A look at the last decade should be enough to convince anyone that buy and hold does not work. Unless you were born in 1932, 1949, 1974, 1982, or 2003 and were of sound mind and body to even actually buy stocks, then you’re chances of being able to make money from buy-and-hold were slim. 5 times in the last 80 years buy-and-hold would have actually worked very well. Those are miniscule odds. You are better off develop a system that is about making desired profit targets in a 6-24 month time frame, and cut your losses quickly if it doesn’t work out. My advice on developing a system would be to spend as much time on your exits as your entries and you will probably end up being profitable in the long run, and that’s really the name of the game. Making money over time.

World News

2010-01-27T10:03:00.000Z

World News: Seems as though the IPO of UC Rusal did not go as planned. This development shouldn’t be surprising since most IPO collapse in their first year of trading. Also, the possibility of IPOing at the crest of a big wave down in the market is terrible timing. I am still observing the market activity over the past few days, and there are key signs that this decline might be something more. I am hearing chatter that the market declines in the US are linked to the defeat of Martha Coakley by Republican candidate Scott P. Brown. The experts say this is significant because Democrats maintained that position for 46 years. (Quite a long time) Now, the Democrats are scrambling to make sure the keep their remaining seats in the upcoming elections. How will they do this? By going after the bad guys. Who are the bad guys? The Banks. The Banks would could do no wrong (and even if they did, the taxpayer would bail them out) are now getting turned on by President Obama and the Democrats. This seems to be one of the prevailing theories of the market decline. I have got a simple enough answer. The markets are going down because people are selling and there is no one left to buy. Period. The markets worldwide had been overbought for the last 5 months. If anyone took the time to notice, when all the world government started announcing they were coming out of their recessions the market barely rose. Some markets are no better than they were 4-5 months ago. So all the good news comes out but the markets do nothing. Toyota is getting their reputation bashed because of a 2.3 million car recall. I believe they had a 4.3 million car recall just before that. I guess they have a lot of production issues currently. I wouldn’t really worry too much about that. They are the #1 car maker in the world, and sometimes you have setbacks. Ma Zhaoxu, Foreign Ministry spokesman, warned the Obama administration that giving guns, missiles, and helicopters to Taiwan will damage their economic and political ties. I would think so. I have been noticing a lot of squabbling between the US and China of late. That’s what happens when a new superpower emerges. I heard a good quote from a play that I recently attended. Something about the United States flourishing on individualistic capitalism but the new century will be China’s, and that will be predicated on state (or collective) capitalism. You should maybe check out the play for yourself. The play is called the Power of Yes being shown at the National Theatre. So if you are in London sometime soon, check it out. It’s a kind of step by step explanation of the financial crisis.

Learn To Trade

2010-01-25T14:58:00.004Z

by Niki Arinze

Learn to trade: Continuation patterns – Continuation patterns are patterns that form when price takes a pause (i.e. trades sideways, choppy, or moderately pulls back) in the contrary direction of the major trend. It is also important to try and recognize what the major trend is so that when pause periods occur, you don’t mistake them for actual changes in trend. Take a look at CREE. We can see that CREE was in an uptrend from March. It moved up for three months and then had a gap day 5-27-09. If you were watching this stock, there was no need to rush in. Stocks ALWAYS (and I do mean ALWAYS) provide an opportunity to get on board of a trend. Sometimes you have to wait longer than others. The period from June through the middle of July was that time. You will see the a-b-c zigzag I drew to signify one of the continuation patterns that I think works very well. The time to go in was after the MACD crossed over in mid July. This continuation pattern provides an initial entry point or an additional entry point (if you got in back in March) to add to a position to take advantage of the uptrend.

Weekly Wrap: Your source for stock, stock market, and stocks info

2010-01-23T14:41:00.004Z

Weekly Wrap: The market is feeling the heat right now. I know some bears are finally feeling some relief after actually believing they might be crazy. Some of them even believe the party is over. I am skeptical of it until I start to see the market pick up on the down side. It's long overdue and about time that market participants come back to their senses about the prospects of recovery in the economy. Japan Airlines entered bankruptcy earlier in the week. It is Asia's top carrier. It is an example of an organization which tries to sustain itself with massive amounts of debt. First Solar, a alternative energy company, signed a contract to build 22 megawatts of solar power plants in New Mexico. I have got my eye on First Solar (FSLR) because I think they will be the Exxon (XOM) of the future for the alternative energy industry. Bank of America said they lost more money than expected. No surprise there. That bank has real financial troubles that most of the public is not privy to. Also, I think I heard a quote from Bill Miller (fund manager at Legg Mason) that he was in there buying and he would buy more a few weeks ago. No coincidence that Legg Mason got blasted this week. Maybe investors are tired of seeing massive losses from his value investing strategy. No disrespect to you value guys but they are just pieces of paper. Price IS the only thing you can trust, and when it’s going down. There is no need to get in front of that train. Most of the fervor this week is coming from President Obama's proposal on banning proprietary trading. Interesting, we'll see how far that goes. Most of the sell-off to end the week was blamed on Obama's new plan, but in reality the stock market was rising on fumes. Lots of stocks just ran out of steam, and people decided to sell.

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

2010-01-23T10:39:00.005Z

Market Pulse: The last 3 days have been a phenomenal sell-off in which the S&P 500 has lost 5.1% from the intraday highs on Jan. 19. It took 3 days for the S&P 500 to lose 58+ points. After a relentless rise since the March lows, I would say that there may be a change in character taking place in the market. I have been saying since March that the bear market rally has been getting long in tooth and we were due for a reality check. Maybe this is it. I don’t know. I actually thought it was in late August, then I thought it was in late October, and then after the market rallied again. I didn’t know what to think, but I am not willing to pay high mark up prices for stocks in general. Now, we may be at the biggest juncture in the market since March 2009. Take a look at the chart of the S&P you will see two sets of dotted red lines. These lines signify the intraday high and low of the first 3 days of the month. This is a strategy I developed after reading the book, The Logical Trader, in which he talks about the first 20 minutes of the trading day being the high or low for the day about 17-23% of the time. So I thought why can’t this be applied to a month? I did a little research and found out that a lot of the time the first 3 days of a month can determine the high or low for the MONTH. So, to see which way an individual stock or index will move, just watch the first 3 days of the month and it may give you a GOOD idea. Try it out yourself. Look at the first 3 days of every month since the March lows and see if it marked the high or low for that month. The results might astonish you that it could be that simple. Now, back to the chart. You can see that the low for the month (Jan. 4) has been significantly breached. That is a potential warning sign for a change in trend because prior to the last 3 days the low for the month had been put and the market was moving up, albeit slowly. Now it’s plunged through on high volume, which indicates selling pressure. Market leaders like AAPL, GOOG, ASIA, JOYG have been getting bashed over the last several days. When the market leaders start to crack, it’s another clue that the trend may be changing. Another technical clue is the MACD has turned down, which is more confirmation of a change in momentum. The optimism just 3 days ago was above levels we saw in 2007. With this sharp break in the market, we shall see if it dents all the optimism about a recovery or this is start of the bear market I have been anticipating for the last 5 months.

Currently Undergoing Construction

2010-01-21T09:55:00.002Z

Did You Know?

2010-01-11T14:11:00.001Z

China has now moved in front of the US as the world's largest auto market.

Learn To Trade: Your source for investment or investments, stock, stock market, and stocks info

2009-12-30T03:02:00.004Z

Imagine a 15 car train sitting in a train station. Now, take a look at the train operator. Imagine the locomotive gears are jammed and the train operator is frantically working too unlock the gears. He is only able to move the train forward or backward about 10-15 feet in either direction. It’s safe to say that the train isn’t going anywhere until the operator fixes the train or until the situation gets resolved. This example, is the same type of thing that happens to a stock in the stock market. Let’s say that a stock has been going up and down for 3 to 5 months without much upside or downside progress. Sometimes a stock can get “stuck” trading in a range. When a stock starts trading in a range where support and resistance are clearly defined, it’s best to pass on that opportunity and move on to another stock that is moving. A stock that is moving will provide more of an opportunity for good fortune on your investment or trade. If for no reason other than to have your money work rather than idle by because even if you get stopped out rather quickly. You can then move on to another potential winner, rather than be stuck with a position that vacillates back and forth for an extended period of time. There is an opportunity cost to having your money sitting in an investment or trade that isn’t doing anything. The cost is lost potential profits (i.e. opportunity) from stocks that are trending up, while you’re sitting in a stock that isn’t doing anything. Now, imagine a train that is moving top speed across the country.But this train DOES slow down to make intermittent stops. The train allow passengers to get on and off with ease. Try getting off a train going 157 miles per hour. The result isn’t pretty. This example is characteristic of a great stock. A stock in which the trend is clearly up (and picking up steam), but it DOES pullback occasionally (because people are exiting or lightening up on their position and other people are now getting aboard this uptrending stock. And this new group of passengers will take the stock to higher highs. Stick to stocks that are active and stay away from stocks that are not going anywhere.

H.B. Fuller Company 10-Year Chart

2009-12-30T02:57:00.004Z

Once you have determined that the train is moving (In this case, I would say that it started moving upwards in late 2000, early 2001), you are looking to become a passenger who wants to jump aboard this train. You want to wait for the right time though, because there shouldn't be any rush. Too many people think that when a stock is moving up, it's going to get away from them. That's people's emotion talking for them. No stock will ever get away from you, if you wait patiently for that buying opportunity.

Cree, Inc 10-Year Chart

2009-12-30T02:47:00.003Z

Here is an example of a stock which languished for 8 years before finally breaking out this year. If you bought this stock in March 2001 for $20, it was still $20 in March 2009. You made no return in those 8 years, and missed out on other potential winning stocks in the market. To top it off, the value of the dollar has gone down which eroded your purchasing power. $20 in 2001 won't buy what $20 in 2009 will buy. So you would have been losing wealth even though the price was the same. Now, the price has increased to $55.28 as of today's close, so you would have made enough to cover inflation and made a pretty decent profit after 8 long years, barely. Why not invest your money somewhere else where the action is during 2001-2009, and then put your money into CREE in 2009?

Closing Out the Year

2009-12-28T18:53:00.000Z

There are about 3 days left in the trading year. It is safe to say that 2009 was an unprecedented year. I think unprecedented was one of the most used words in 2009. Markets worldwide have moved straight up since March. The S&P 500 has closed up the last 9 out of 10 months. The NASDAQ has closed up 9 out of 10 months. The FTSE finished up 8 out of 10. The Dow 8. The DAX 8. The CAC 8. The SENSEX 7. The Straits 7. The Bovespa 9. The RTSI 9. The Hang Seng 7. And the weakest performer the Nikkei which was up 7. (I left out some, for expediency) Although for the Nikkei, most of that move was made in the last 19 trading days. So you can see that 2009 was definitely a year to be long. So, what's in store for 2010? I, honestly, have no clue because my expectations for 2009 were greatly exceeded. So it begs the question, how can 2010 outdo 2009. The mainstream media wants to talk up the fact that the S&P 500 is up 24.71% as of Thursdays close last week. But really the S&P 500 is up 66.51% from the March 9^th close in just 209 trading days. So are we to expect another 66.51% rise straight up for 2010? Well, some inflationists, such as Marc Faber, think that as long as Ben Bernanke keeps printing more (phantom; I will explain the phantom part in later blog posts) money the US stock market can continue to rise unabated. But he thinks the downfall will be the US dollar and Treasury bonds in the long run, which he probably right about anyway. The question is when will it come. Do we need to know or predict what is going to happen next year to make money? The answer is, No. I believe that the future can be predicted in current stock prices by simple technical analysis. So, right now, I believe the trend is up, but my problem is how long can the markets go up without some kind of fundamental backing. I don't need much just more than a little bit. I am sure there are some companies out there making money in the last two years. Are they going to earn enough to lift the world economy? I guess we will see in 2010.

Rose Colored Glasses

2009-12-10T04:08:00.002Z

A lot of people (professional & amateur alike) are looking at the past 8 months in the stock market and proclaiming a new bull market. And they may be right, but only in the short term. It helps to take a look at the big picture every once in a while to see where you are. The optimism in every market right now is contagious (i.e. gold, oil, world markets, coal, copper). All these markets have been going up with each other roughly around the beginning of 2009 in the so-called “reflation trade”. This premise is based on the idea that the Fed can create inflation at will, regardless of the dynamics of market activity. So far it seems to be working (or maybe not). I look at the S&P 500 as a general gauge to the US markets. Why don’t I look at the Dow Jones Industrial Average. Because it is only 30 of the largest US companies in market capitalization. It doesn’t represent the US markets as broadly as the S&P does. And if you want an even broader measure, you should take a look at the Wilshire 5000. The S&P 500 is good enough for me, because that’s where big money tends to play, and in the last few months the big money has been reluctant to add to their positions. Even with the declaration that the recession is over, the market has failed to move more than 8% in the last 3 months. Shouldn’t the market go up, now that the recession has been declared dead? You would think so. But markets don’t work like that. You need to be a contrarian at heart to make any money. And right now, there isn’t a whole lot of opportunities to go long because everything is up. And so far, we have been grinding and chopping for the last 20 days or so. It is my belief that markets will probably start heading down fairly soon, but I think it may be a long process before we finally reach the peak. So take a look at the small picture and then at the big picture. Two different perspectives on the same thing, huh? Exactly. For someone, just looking at the last year the market looks like a great investment. But for someone looking at a bit larger time frame, the market looks like a straight line in an almost vertical path. To believe the market is going to continue the same trend up, you must believe that that almost vertical rise since March 2009 will continue, no? So, if the trend does continue, the S&P 500 should be breaking the all-time highs in 2007 by the end of 2010. Likely or not, you tell me?

Small Picture

2009-12-10T04:05:00.004Z

Big Picture

2009-12-10T04:05:00.002Z

Back from my hiatus

2009-12-10T03:51:00.001Z

Hi, I am back after a pretty long hiatus from regular blog posting. To be honest, I got tired of saying the same things over and over again. It is difficult being a realist in time where society is desperate for any kind of optimism. Even bad news is optimistic these days. We have entered a new phase of denial for all who believe the bureaucratic officials who espouse only that the “worst is behind us”. I believe that this statement is very far from the truth of the situation. The majority of people who have little knowledge of economics, finance, banking, law, and politics have been duped into thinking that the current recession we are in is something that we will escape from without a price being paid. Ask yourself, what’s really changed? The truth is when you sit down and think about it, very little. One must have an understanding of the current situation and realizes its importance as a key place in world history. We don’t realize it now, but the times we are living in now will be written and talked about for many years. I am going to keep trying to tell the truth about the situation, no matter how much the “truth hurts” as they say. In my recent blog respite, I learned some things. Some things that I think are quite important that everyone know, in order to stay afloat in our current economic system. And once you grasp the idea of these truths, you will be better able to survive in the next few years. In addition, it might answer some questions you may have had, and make sense of things that occur every day in the world.

Market Musings

2009-12-01T14:28:00.002Z

The S&P 500 finished up 5.74% in November, making that 8 out of 9 months since the March lows that the index has closed up. There aren't many examples in history showing that kind of uninterrupted rise except for "actual bull markets". If the market the market has been continuously going up for 8 out of 9 months and this usually only happens in bull markets; then why don't I feel confident that this party is going to last. Well, its the performance of the market recently. For all the hype, the market is up very significant in the last three months, and it seems to be losing momentum. The trend is still up, but I think it would be dangerous to start buying now if you haven't already.

Currency in Circulation

2009-11-13T12:28:00.002Z

Divorced from Reality

2009-11-13T12:18:00.004Z

I have been on break for awhile. Had to get some work done and figure some things out. Full-time trading doesn't always allow you to have spare time. I have been amazed at the market's ability to go up month after month yet reports about the health of the economy show deterioration. I still believe the rally is based on false hope and the economic realities will have to be addressed. From a trader's standpoint, every stock I see is getting close to nosebleed levels based on a glance at it's chart. I like to buy stocks going down or experiencing correction. Not stocks in straight lines upward.

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-09-28T09:28:00.005+01:00

Weekly Wrap: We saw the first signs of professional selling last week. The market’s persistent rise from the March lows finally saw some sellers come back into the market. The Federal Reserve made a policy statement that Wall Street didn’t like. This whole bear market is a process. Right now, I believe we are experiencing the upwave within a larger downwave of a bear market.

Marc Faber Interview

2009-09-25T13:46:00.001+01:00

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-09-21T09:40:00.003+01:00

Hi, the S&P500 rose 2.45% for the week. If you look at the chart, it was a steady rise up. Outwardly, the stock market’s rise is anticipating the economy picking up steam. I am a little skeptical of the markets rise because you would need to see a concurrent rise in the economy. Either the markets are wrong and they will start to go back down again. Or the economic recovery is here and happy days are here again.

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-09-14T09:03:00.006+01:00

Weekly Wrap: Last week the Federal Reserve said in its beige book that the U.S. economy is stabilizing. How ‘bout…no. The U.S. economy is stabilizing!? Only if you live in a dream world. There are many economic measures of health that you could look at such as credit growth, auto sales, gambling sales, retail sales, unemployment, housing, etc. These reports are apparently “less bad” but they are still bad. The market has just become numb to bad news anticipating a rapid recovery. Foreclosures dropped a little in August from their record high in July, but still looking to march higher as more and more people are underwater on their mortgages and can’t pay. That spells trouble for the banks, by the way, but you won’t hear any mention of it now because of the rise in optimism since the March lows. Gold has broken out above and closed above $1000 to a record of $1004.90. Keep your eye on gold because it is “real money” and with all the global money printing going on, somebody is going to have to pay the bill. I think the “powers that be” will try to pound the price of gold back down, because they can’t afford for the world to start panicking about the currency they do business in. What I think is interesting is that there is a concerted effort to hold the price of gold down over the last 2 years, and they haven’t been able to do it. The demand for gold right now continues to rise and I don’t think it will abate. You can expect higher prices for gold in the coming decade without a doubt (same with oil, too.) The market blazed higher last week. All the index made new closing highs for the year. Completely taking bears like myself by surprise as I thought the market was due for some kind of correction. I don’t know how long the market makers can keep propping the market up with no volume, but it will end. They always do.

Consumer Credit Comeback!?

2009-09-14T08:48:00.004+01:00

The graph below just speaks to the true nature of credit contraction taking place in the "real economy". What people are really doing is cutting back on credit. We are witnessing the massive shift in psychology from frivolity to frugality. I also think this change will be the new normal. Americans aren't going back to the days of "spend, spend, spend money I don't have".

Commentary: Your source for news, commentary, and stock info

2009-09-11T08:37:00.002+01:00

My thoughts on this rally....

The S&P 500 broke to new intraday highs yesterday confirming that the bear market rally is not over. In fact, it may go much higher. I don’t know what to make of this rally. Is it a bear market rally or a new bull market? You don’t want to continue to stay bearish as a new bull market starts. But my instincts tell me that there is something not quite right with this rally. For example, the market is continuing to rise on decreasing volume. Where is the professional money? Only they have the power to drive prices up, but we have prices go up on decreasing volume. Has the financial mess has really been fixed? Banks are still holding trash that they can’t get rid of on their balance sheets. Companies don’t seem to be at all anxious to start borrow or hiring new people. We could go all the way back to the 2007 highs, like some bullish pundits are speculating. But I think at some point “the crowd” will realize that the entire rally is fake, and it will collapse. That’s my view. For now, you want to be long. I think when we get to the end of this rally, something event will signal the top. I also think it will be fairly obvious to those who follow markets closely.

Military Spending

2009-09-08T09:04:00.001+01:00

What did Eisenhower say about the "military industrial complex" again?

Natural gas continues to plummet

2009-09-08T08:53:00.004+01:00

Natural gas plunged 10% last week. I broke to new lows. Long speculators have been unceasingly punished for attempting to "buy the lows". I am no expert in natural gas fundamentals, but I am expert in charting. And the chart says that market participants have been exceeding bearish on the prospects for natural gas, willingness of bears to short the market still remains but the their power is waning. It is only a matter of time before the bulls regain control of this market. It is obvious that their is massive accumulation going on from professional money, but they haven't soaked up all the supply. When they do, a new bull advance in natural gas will start. So, from an opportunity standpoint natural gas is probably one of the best investments out there.

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-09-07T13:09:00.004+01:00

We started last week with a sell-off on Tuesday that the market retraced those losses by Friday. The payroll number came out at 216,000 people losing jobs. I sound like a broken record, but you can’t have a “recovery” when people are still losing jobs. We aren’t just losing a few thousand, we are losing jobs in the hundreds of thousands. In other news, retail sales for the month of August fell 2.3%. Apparently, it has been the smallest decline since Sept. ’08. A lot of the pundits think that because consumer spending was 70% of the economy in the boom times, that Americans are going to come out of their shells again and start spending like the good ole days. I believe this theory to be false. I think there has been a dramatic shift in the psyche of the American consumer. Their habits will not be towards profligacy but towards frugality. I showed a chart on my blog on March 10th titled “Seismic Shift” which showed personal consumption as a percentage of GDP. Everyone who pays attention to financial news knows that “in the past” the American consumer made up 70% of the U.S. economy. So, will that fact remain unaltered? I don’t think so, you are already seeing and will see more of a pullback in consumer demand for goods people really don’t need. What is interesting last week was the big move in gold? There is a lot of chatter about what is behind the move in gold. I don’t think the chatter really matters. Who cares? The point is gold is moving and do you have a plan? I am planning to put a significant portion of assets into gold at some point. I have been looking for almost a year for a correction in the yellow metal because of all the bullish pundits and newsletter writers who say that you must own gold because of the dollar collapse. I do believe there will be a currency crisis in the near future and those holding only dollars will lose substantial purchasing power (i.e. wealth). For now though, I want to see a pretty big correction, but gold just won’t go down. So, for all of you that believe news comes first then markets move. Explain to me why gold is moving when there really isn’t any news to support it. Let’s say gold takes off and goes up to $1600 an ounce or goes up and collapses to $600 an ounce, do you think you will be told the reason (from the mainstream media) before it actually happens? Definitely not, the reason for the move will only come AFTER gold makes its move. That is the reason why to actually “make money” you have to buy or sell something before other people catch on.

World Unemployment

2009-09-04T08:18:00.002+01:00

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-08-31T07:55:00.003+01:00

Weekly Wrap: Last Week marked another week that the market closed higher, albeit a small one. The S&P 500 hit its highest point (1039.47) in the entire run up from the March lows. You have may have heard the saying “Buy ‘em cheap, sell ‘em dear”. Or may have heard,”Buy the dips, sell the rips.” They are essentially saying the same thing. And it goes for all markets, not just the stock market. That means the housing market, the fish market, the bond market, or even your local grocery market. You have to buy goods (and plenty of them) when they are cheap, and sell them when they are expensive. We all do this when we go to our local supermarket, but why is it that the majority of investors don’t do this when it comes to the stock market. Well, there is a reason. But that’s a side issue and I won’t go into the “Why?” investors do it. I am just going to tell that you should approach the stock market the same way you approach the supermarket. When an item is on sale in the grocery store, we rush to buy more. When an item is on sale in the stock market, investors dump the stock because they fear they are going to lose all their money. You should be doing exactly the opposite. You should be buying a stock that is going “DOWN”. It seems counter-intuitive. But if you want to make money, that’s what you have to do. Generally, you have to act contrary to popular public opinion (“the crowd”) in order to be successful. So, with that said, herein lies the point. The market has now vaulted up from the depths of pessimism in early March to the throws of optimism in late August for six months IN A ROW. To continually go up without a single month closing down is impressive. What is equally impressive is that you would be hard pressed to find a time period in which the market went up six months in row in the last 100 years and it didn’t kick off a new bull market. Especially considering the type of collapse the stock market had in 2008. That’s what makes this time period extremely interesting because if the market is going to collapse (like I think it is), then it is going to happen very soon because eventually the market will run out of steam. It is already running out of steam. The volume has been dying off every month that we go up indicating that the professional money is not interested in higher prices. You should know that 70% (maybe even more now) of trading in the market is done by professionals and it is THEY who truly have the power to move markets up and down. They are the only ones with the kind of capital that can stop a bear market in its track and launch a new bull market. A keen observer would have spotted their participation in late February and early March, when the volume was expanding. That let you know that the professional money was in there buying the market from all the panicking investors who were listening to all the bad news at the time. Right now most of the news is being portrayed as good, yet the professionals are not interested in buying more, which is why you don’t see the volume expanding (it’s shrinking). Meaning that as soon as they start selling, there will be nothing anyone can do about it. And from a technical perspective, I think the market has maybe another 2 months up, which would make it eight months IN A ROW from the March lows. I think that would be absurd in my opinion because I don’t see any of the economic data being released supporting stock prices at the levels. So I am anticipating a correction somewhere in the next two months. It could be September or October. It doesn’t really matter when it happens because there are very few good risk/reward opportunities to the long side. Because of that, it must be time to start looking to the short side (being contrarian). Buy ‘em cheap, sell ‘em dear. In other news last week, Ben Bernanke was nominated for another term by President Obama. Answer me this? Why is it that the American people don’t decide (i.e. vote) on who gets to be in charge of the Federal Reserve if it is a government agency? That’s because it isn’t a government agency. Do some research. The Chairman of the Federal Reserve is decided by a small committee of people who is then given the O.K. by the incumbent president. I don’t thinking the nomination of Bernanke by President Obama was a good thing. President Obama said that it was his “bold action and outside-the box thinking that has helped put the brakes on our economic freefall.” Really, we’ll see about that in 2010, if his “bold-action” and “outside the box thinking” will put the brakes on our free fall. All I am going to say is “One of us is going to be right”. Either President Obama and Bernanke are right and the recession is over, or I am right this time period will be recognized for what it really is, a depression. Meanwhile casualties in Afghanistan climb. 45 U.S. troops were killed in July, making it the deadliest month for U.S. troops since the conflict started 8 YEARS AGO. Can somebody tell me how much is this conflict costing Americans and why are we even there fighting in the first place? Because most of the people I talked to have no idea.

Did You Know?

2009-08-29T11:13:00.000+01:00

Did you know that "companies in the 1990s could go public with annual sales of about $25 million, while the threshold today is $100 million or more?"

Source:

Investor's Business Daily

IPO View Still Foggy But Better

8/26/2009

US Economic Statistics & Data Part I (8-26-09)

2009-08-26T12:35:00.003+01:00

I have posted the most recent I could find economic statistics and data. I say, be your own economist. Take a look at the charts and graphs and see for yourself what the US economy is doing. You don't need some guy in a crusty tweed jacket with goofy glasses telling you about how the economy is. You can see for yourself and come to your own conclusions. If you see recovery, then that's great. If you don't see recovery, then that's great. It's all about what the numbers mean to YOU.

US Economic Statistics & Data Part II (8-26-09)

2009-08-26T12:34:00.002+01:00

US Economic Statistics & Data Part III (8-26-09)

2009-08-26T12:34:00.001+01:00

US Economic Statistics & Data Part IV (8-26-09)

2009-08-26T12:33:00.002+01:00

US Economic Statistics & Data Part V (8-26-09)

2009-08-26T12:32:00.000+01:00

Robert Prechter Interview on Bloomberg (5-29-09)

2009-08-26T11:25:00.003+01:00

I am putting an old video interview of Robert Prechter back in May. As this current rally finally reaches its last legs, we'll see if he was right or not. New bull market or bear market rally? What do you think?

Trade Around the World

2009-08-25T08:14:00.000+01:00

The Stock Market & The Economy Have Nothing To Do With Each Other

2009-08-24T01:52:00.003+01:00

Real traders know that the economy and the stock market have nothing to do with each other. You trade what you can see. The market bottomed in March and has been rising ever since. The saying goes "the trend is your friend".

The Real People Media

2009-08-23T19:13:00.001+01:00

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-08-23T15:01:00.003+01:00

Weekly Wrap: Well, well, well the Dow Jones Industrial Average, S&P 500, and NASDAQ are all at new recovery highs. If you have been stupefied at the ever-relentless rise of the major indices with a meaningful pullback or moderate correction, you are not alone. Even the professionals are dumb-founded by what is going on in these markets. Some say, that the is the most tumultuous market environment they have ever seen in their entire careers. Trying to forecast and predict what the market will do over the next year has been nearly impossible, but not completely impossible. Back in February and March, it didn’t take a genius to figure out that the market was going to have a sizable bounce because there was so much negativity and pessimism about the markets and economy. This is how markets work. They get negative and oversold, and this is precisely when you MUST buy. And when they get giddy and overbought, this is precisely when you MUST sell. So, what do we have now. It looks like optimism about recovery is running rampant. Every mainstream media outlet is saying the recovery is around the corner and the good times are coming back. Is this true? Probably not, because you could probably make money, if you did the exact opposite of what the mainstream media says. It’s just the contrarian nature of being a good trader/investor. So, to make money, you have to be ahead of the crowd. And right now, I am starting to get a little bit uncomfortable with the meteoric rise of the markets off of the March lows. Markets never go straight up and they never go straight down forever. So you can be assured that the market will run out of steam on the upside. I want to be early in inform you that if you have long positions in the market, it may be time to start lightening up on your positions or even outright liquidation because I believe the markets probably have (maybe) another 2 months on the upside before reality hits. There isn’t going to be any recovery this fall. And for people who maybe just started to get back into the market in the last few weeks, will probably be the ones hurt the most by the coming decline. The coming decline will be swift. In the beginning, the mainstream media will say it’s just a correction and that it is constructive and healthy for the market to correct. But then the selling will start heating up on the downside, and they will ask, ”Why is the market going down, if there is a recovery on the way?” Then, the market will head lower (by then, the market will be down considerably) and they will start to doubt whether the recovery is coming. And lastly, they will realize that the recession continues and that the preceding market rise was just a bear market rally. That’s how these things go. Stay ahead of the news by watching the market. I think the market rally is definitely in its last legs now, and I am preparing to sell my long position and even start putting on short positions. Some news last week, house prices rose in July 7.2% in the US. Apparently, for four months in a row. Meanwhile, delinquency and foreclosures are still hitting brand new records every day. Is the housing market in the US hitting bottom? I don’t know, but I still think it’s too early to start thinking about buying a house. Prices have come down a lot, but if you want to be sure you are getting bargain basement prices, I would wait another 2 years. Oil prices hit $74.72 last week high. It hasn’t even been confirmed that the economy is growing in the US and oil hit back at $74. Wow! Just think where oil will be when the economy is growing at a good pace again. Say hello to triple digit oil prices again. Maybe not this year, but certainly in the next decade. Speaking of oil, natural gas is getting crushed. I have no idea why natural gas is going down some much. It hit a seven year low last week at $2.80 per mil Btu. Do people still use natural gas? Of course they do, so it makes no sense to me. But there is an opportunity there. When things get so out of favor or so low, it starts becoming an attractive situation to invest in. “Value for money”. Natural gas is “value for money”. Could it go lower, yeah, probably. But it’s pretty damn low. I’ll finish with Ben Bernanke. He likes to print money. He also likes to make us feel better by telling us “everything will be ok” because we will just “print money” if we have problems. In Jackson Hole, Wyoming, “that the U.S. is on the cusp of recovery after a long, brutal recession and the worst financial crisis since the Great Depression.” Really, this is coming from the guy who said the subprime crisis was contained. The same guy who said house prices will stabilize in early 2007. The same guy who said the economy wouldn’t experience a recession in 2007. And we are supposed to TRUST him when he says the nation is on the cusp of recovery? I would give too much credence to what that guy says, what do you think?!!

FinancialSense.com Interviews

2009-08-22T10:02:00.011+01:00

These are 3 good interviews from FinancialSense.com. I listen to their broadcast every weekend because they always have good guests on the show and I always learn something new every time. This weekend is particularly good because there is an interview of Jack Schwager, author of the Market Wizard books, explaining some of the things it takes to be a successful trader. Also, there is an interview with Louise Yamada, who is a well-respected technical analyst on Wall Street. That is followed by Gerald Celente, from TrendsResearch.com, who has been successful over the last 20 years at forecasting trends.

http://www.netcastdaily.com/broadcast/fsn2009-0822-2.asx
http://www.netcastdaily.com/broadcast/fsn2009-0822-3a.asx
http://www.netcastdaily.com/broadcast/fsn2009-0822-3b.asx

Chapter 11: For Athletes?!!?!?!??!

2009-08-21T05:06:00.007+01:00

Professional athletes are not usually known for their financial prowess. So it may come as a suprise to hear that Dave Bing founded a successful steel company or Joe Montana is a partner in a successful hedge fund. The real statistics may shock you. Here are some excerpts from an article I came across:

"Similar to lottery winners, with no financial prowess or discipline, most pro athletes go completely broke in less than 10 years after retirement. In fact, 60% of retired basketball players go broke in 5, and 78% of football players in 2! Athletes are forced to sell their homes, sell their championship rings, and file for bankruptcy."

"When a 22-year old is suddenly getting pay checks in the ballpark of $500,000 every two weeks, the idea of remaining somewhat conservative while planning for the future seems ludicrous. They find themselves purchasing $10 million dollar homes, 10 cars of at least $125,000 apiece, fancy restaurants and all-night parties, not to mention the drugs, the alcohol, and the gambling that is often associated with some of these rich celebrities. They fail to realize that once the income stops, the monthly payments don’t."

"Between 60-80% of professional athlete marriages end in divorce."

"Children: NFL’s Travis Henry: 9 women, 9 children. At roughly $3000 a pop, his monthly child support payments are equivalent to what some people earn in a year."

Check out the article. It is a interesting 5 minute read. People's comments to the article are hilarious.

Source:

Cosmoloan

http://www.cosmoloan.com/money-management/the-6-main-reasons-why-most-pro-athletes-go-broke.html

Follow the Money...

2009-08-21T04:48:00.002+01:00

The opposition to the proposed health care bill is hitting a fever pitch and it looks like, for the moment, this is the biggest issue in U.S. politics, but I want to talk about something that none of the politicians (really) want you to know. Ever heard of the names Nancy Pelosi, John Boehner, Harry Reid, Dick Durbin, Lamar Alexander, or Patty Murray. No? Well, I don't blame you if you don't know the “Who's who?” in American politics, but these are the names of none other than the elected officials who are supposed to be running our government. Why am I mentioning these people? Good question. I graduated with a B.S. in Finance, so being a “finance guy” I like to follow the money. I did a little digging and I found some interesting things. Such as Nancy Pelosi (D-CA) has raised $850,477 for 2009-2010 cycle fundraising, and that one of the top 5 contributors to her campaign is Boeing ($10,000). Like John Boehner (R-OH) has raised $1,094,448 in campaign money and his four top contributors are American Financial Group, American Electric Power, Lockheed Martin, and Southern Co, with American Financial Group giving the most ($38,000). Meanwhile, Harry Reid, D-NV, received money from MGM Mirage ($137,350), Harrah's Entertainment ($74,000), Station Casinos ($71,200), and JPMorgan Chase ($61,100) contributing to a grand total of $10,930,627 in 2005-2010 cycle fundraising. Do any of you out there think there isn't a little bit of “conflict of interest” when a proposed bill that benefits any of these major companies comes into the House or Senate? I believe there is, but it speaks to a larger problem. If these corporations are contributing so much money to the politicians so that they can stay in power is it any wonder why “the people's” interest do not get represented in government these days. Look, I don't know anything about politics and I am not particularly to interested in the machinations of the political machine, but I DO know about money. I KNOW that “money talks”. So do some digging for yourself, I think you will be interested in what you find.

Don't know where to dig? I thought so. Go to http://www.opensecrets.org/. The homepage of the website will explain it all. It's a site dedicated to primarily “Following the money in Washington”. See who's getting what and how much. Want to know who's getting all the bailout money, they will tell you. Want to know who in Congress is getting the most campaign money and from whom, they will tell you. Want to know the special interests lining up to get their piece of the pie when the health care reform bill gets passed, THEY WILL TELL YOU. Take a look. http://www.opensecrets.org/

Commentary: Your source for news, commentary, and stock info

2009-08-20T09:39:00.003+01:00

Don't Take Yourself So Seriously...

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-08-17T07:51:00.003+01:00

Weekly Wrap: TBA

Sector Focus - Shipping

2009-08-14T04:32:00.002+01:00

A rise in optimism breeding "recovery" talk...

2009-08-12T13:48:00.005+01:00

Did You Know?

2009-08-10T20:11:00.006+01:00

Did you know that the busiest port in 2007 was Singapore? They had 27.9 million TEUs worth of cargo come in and out of their ports. A TEU stands for twenty-foot equivalent. Wikipedia defines TEUs as "an inexact unit of cargo capacity often used to describe the capacity of container ships and container terminals. It is based on the volume of a 20-foot long intermodal container, a standard-sized metal box which can be easily transferred between different modes of transportation, such as ships, trains and trucks."

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-08-10T09:05:00.012+01:00

Weekly Wrap:How do you measure the health of the economy? In a short answer--many ways. Economists have devised many methods to ascertain the health of the national economy. One of those methods is the ISM manufacturing index. This index is "a monthly index released by the Institute of Supply Management which tracks the amount of manufacturing activity that occurred in the previous month.” Any number above 50 signals economic expansion, and any number below 50 signals economic contraction. Last week the ISM manufacturing index number was released. It was 48.9 in July, which signals the economy is still in contraction. In June the number was 44.8. So you can see the number is up from the previous month. This information was looked upon favorably by the so-called experts. I think economic reports should be taken with a grain of salt though, because they can't be revised and frequently altered. I believe what truly moves markets are human psychology and social mood. So you should attune to changes in sentiment because this is what "really" drives markets. Along with the ISM number last week, consumer spending was up 0.4% and personal income was down 1.3%. Ford reported that their July sales were up. That wouldn't be due to the "cash-for-clunkers" incentive program that the government is sponsoring, would it? The same incentive program which the Senate approved another $2 billion for and President Obama signed into law? I wonder. That's funny because I don't remember the Senate asking me if I wanted to give free money away to people to keep the car industry going. Meanwhile, GM’s sales fell19%, Chrysler’s 9%, Toyota’s 11% and Honda’s 17%. But those were less than expected. So "less bad" is the new "good"? I guess so. The market was up again last week. The S&P500 managed to eke out a 2.33% which was basically due to the short covering on Friday morning. The bears are getting run over by all the optimism. Remember, opinion doesn't mean much when it comes to making money. You can have an opinion about the market or the economy, but when it comes to making your investments you should concentrate on being able to read the actions of the "market" itself. That means learning how to read charts, recognizing what the "herd" is doing, and then reacting. This week should be pretty interesting. I have said for three weeks in a row that I expect some kind of pullback, but the market has been acting very strong. But again, I have to expect some type of correction because markets never go in a straight line up or down. After several weeks in one direction (UP), I expect the market to take a break. On the final note, there is a lot of resistance to ObamaCare. I think it’s funny how he gets these programs named after him. I mean did anybody say "BushCare" when George Bush was in office. No, because nobody liked him enough to give him nicknames. Anyway, according to a Quinnipiac University poll more than half of Americans disfavor Obama's handling of the medical problem. A poll by CNN found that 45% don't like what Obama is pushing for, and most people of over 50 oppose what he is doing. I would have to agree. Trying to push some plan in 3-4 weeks into law, without some politicians (supposedly representing the people) even reading it seems a bit rushed to me. Why not take a considerable amount of time to plan a long-term (100 years) plan for sustainable healthcare, rather than rushing something because of political pressure? Which makes me think. 4 years from now, I wonder what people are going to remember Obama for? Turning the economy around, bailing out Wall Street banks, fixing health care, solving Social Security, and quadrupling the national deficit. Hmmm.

Some things are just unsustainable...

2009-08-07T06:01:00.001+01:00

National Debt By Country

2009-08-06T05:31:00.002+01:00

Alternative Media: Your source for alternative media, news, economic and stock market info

2009-08-06T05:20:00.003+01:00

Commentary: Your source for news, commentary, and stock info

2009-08-06T03:07:00.004+01:00

On Cash For Clunkers

Here is an excerpt from Bob Prechter's latest Elliot Wave Theorist that I think makes a good point. "After millions of Americans "took advantage" of this tax break (the government providing a tax break in the 2000s to people who bought three-ton, gas guzzling SUVs), the apparent boon was exposed as a bad deal when gasoline prices tripled and such cars fell precipitously in value while costing as much as a dollar's worth of gas for every four miles they rolled. Ironically, the taxpayers who never owned such cars paid for the subsidy. The same thing is happening with the "cash for clunkers" plan. It rewards people who have been persistently driving gas-guzzlers while sending the bill to, and thus penalizing, the socially responsible, environmentally conscious taxpayers who bought fuel-efficient cars. The worse the guzzler you have been driving, the more money the government takes from others to give to you, up to $4500. Irony attends both financial markets and government plans. Put them together-as we have witnessed throughout the financial crisis so far-and you get Kafka."

Interview and discussion with Roger Kubarych of the Unicredit Global Research

2009-08-04T19:24:00.000+01:00

Money, Credit and the Federal Reserve: Your source of info on banks, credit, Federal Reserve, and money

2009-08-02T19:01:00.008+01:00

Essential: Understanding Where Money Comes From

Understanding the monetary system is a key element to understanding the way the "world works". Society now revolves around the acquisition of money to maintain or to increase one's standard of living. If you don't know how the monetary system works, then please watch the first 25 minutes of this film. If you don't know how banks actually operate, then please watch the first 25 mintues of this film. And if you don't know where money comes from, then please watch the first 25 minutes of this film. It is essential that we all understand the basis of money creation. If after watching the first 25 minutes of this film, you still don't quite fully understand how it all works then please watch it again and again until you start to really get an undersanding. When you first learned to ride a bicycle, you didn't immediately start riding like a seasoned bike rider. You probably fell down over and over, until finally it clicked and you never fell down again. Try to approach this subject in the same manner. If you don't get it all the first time, watch it again and again and again. Each time enhancing your knowledge. You will truly be awakened.

Where does the money go for the average American?

2009-08-02T09:57:00.004+01:00

I found this pic and thought it was pretty interesting to know where people are spending their money.

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-08-02T07:20:00.006+01:00

Weekly Wrap: Well another up week for the market. Thursday saw the market make another huge push. The S&P500 is very close to breaking the 1000 level. This is right in line with my forecast for this current bear market rally. I made a previous post stating that I think the S&P500 would get to 1000-1100. It seems as though it is right on track for reaching it this fall. Now there is a lot of debate about whether this is a bear market rally or a new bull market. I would like to emphasize that it really shouldn’t be all that important to you if it is or if it isn’t? What is important is how you position yourself for whatever outcome transpires. Having a plan ready and being able to react is what is most important. I am one of the bears patiently waiting for the next leg down in the market, but I actually have all long positions because I can see the trend of the market is still up. Separating your trading/investing from your personal opinions is an essential skill to successfully making money and keeping yourself out of harm’s way if you are wrong. Fundamentally, I am very bearish on the market and the economy. I don’t see a whole lot of impetus for this “green shoots” rally that every is getting so excited about. To me, the economic data that is coming out portends to more economic malaise into 2010 or even 2011. I just don’t see the signs of improvement that some of the bulls see when they look at these economic statistics. I believe a lot of what they are seeing is based on hope. I base my opinion on facts and with a little bit of human psychology and sociology thrown in. This downturn in social mood is of a larger degree than I think most people realize. So the concurrent activity in the economy should mirror this turn down in social mood, and the one preeminent gauge of this social mood is the stock market. One could postulate that the stock market is a proxy for the general mood of society. So, the stock market is now rising; hence, the improvement in consumer sentiment numbers and somewhat less than horrible economic numbers. If you want to know where society is going before is actually gets there, the stock market should be one of the first places you look. When world markets peaked in 2007 and turned down, did anyone see the potential aftermath that occurred? The stock market did. That’s why it peaked and turned down, while everything was great and there weren’t any problems.

Recession or Depression?

2009-08-01T09:01:00.003+01:00

Is this a recession or a depression? Being a student a history, I have to err on the side of depression. I do not embrace that position lightly. My opinion lies upon the bedrock of historical fact-based events and social trends which may provide an outline for what we are currently experiencing and what we will see in the future. A meaningful trend that Austrian-school arm chair economists, like myself, see is a structural breakdown in the US economy largely based on a long term massive credit expansion that has now reversed course. The contraction we saw in 1929-1933 also came after a credit bubble, where people were speculating in the stock market with 10% margin and consumer credit had been rapidly rising throughout the 1920s. I believe regular business cycles end in recessions and credit cycles end in depressions. We have climbed the peak of the credit mountain, and we are now sliding down the other side. This is an excerpt from Robert Prechter’s, Conquer the Crash, “A depression is characterized in part by a persistent, sustained, deep, general decline in production. Since a decline in production reduces debtors’ means to repay and service debt, a depression supports deflation. Because both credit and production support prices for investment assets, their prices fall in a deflationary depression. As asset prices fall, people lose wealth, which reduces their ability to offer credit service debt and support production. This mix of forces is self-reinforcing.” What have we seen in this current contraction in the US economy? Rapidly falling asset prices across the board (stocks, houses, oil, art, etc.) What is different about this current depression? The Federal Reserve Board’s response to falling asset prices has been aggressive. By bailing out financial institutions and providing liquidity to banks, the Federal Reserve is trying to rekindle consumption in the US economy. Because of the recent rally in the stock market and the so-called “better than expected” economic statistics the Federal Reserve has been able to convince some that they have the power to re-inflate the economy again. I think in the end the Fed’s actions will be of little consequence because they do not have the power to move the levers of social mood. Turning around the economy is not like flipping a light switch.

Opposing the Health Care Plan

2009-07-31T20:06:00.001+01:00

Bloomberg - Sector Focus - Energy (Solar)

2009-07-31T08:55:00.001+01:00

Americans are paying 174% more for heatlh care in just 6 years!!!

2009-07-29T03:49:00.003+01:00

According to a Bloomberg article titled, U.S. Pays $2.5 Trillion for Care Costing $912 Billion, Americans are paying outrageous amounts of money for health care. I have put some excerpts below.

"The last time a president tried to overhaul U.S. health care, Americans were spending $912 billion on the system and 40 million were uninsured. Today they’re spending $2.5 trillion and almost 50 million lack coverage."

"Health-insurance premiums for families have risen 119 percent since 1999, according to the Kaiser Family Foundation, a Menlo Park, California-based policy-research firm. Inflation has risen 28.5 percent over that period, according to the Labor Department."

"Health reform could not be more critical," Mike Duke, president of Wal-Mart Stores Inc., the nation’s largest private employer, said in a letter last month to Obama. “Reforming health care is necessary not just to improve the health of all Americans, but also to remove the burden that is crushing America’s businesses."

"If we don’t fix the spiraling cost of health care, it will have such a destructive impact on our economy that every sector of the economy will deteriorate"

Source:
Bloomberg
U.S. Pays $2.5 Trillion for Care Costing $912 Billion
July 28, 2009

Did You Know?

2009-07-28T18:04:00.010+01:00

Did you know that US Senate Re-election rates for 2008 were 94% and the US House Re-election rates for 2008 were 83%? Also, did you know that based on data released by the FEC on July 17, 2009, incumbents from the Senate and House of Representatives (combined) raised $904,714,843 and challengers raised $338,662,867?

Consider the large amounts of money that US politicians are raising for their campaigns. Is it any wonder that re-election rates for incumbents are so high when so much money is involved? Also, consider where that money is coming from? Do you think its coming from regular hard working Americans each donating a little money to their favorite candidate? Did you know that 70.8% of all contributions comes from Business. I think most people have heard of the saying "Follow the money." Is this the type of political system we want?

Source:

All data from OpenSecrets.org: Money in Politics -- See Who's Giving & Who's Getting

Pandora.com

2009-07-28T15:21:00.005+01:00

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-07-27T05:20:00.004+01:00

Weekly Wrap: Last week was another amazing week as the S&P 500 marched up another 4.13%. The S&P 500 is comprised of 500 of the top American companies so it is a broader reflection of the overall markets rather than the Dow Jones Industrial Average (DJIA). A myriad of stocks broke to new 52-highs. We had a huge short covering day again on last Thursday. I would think after two strong weeks up that we would get a sideways to down move this week. I believe that you have to be a contrarian to successfully pull money from the markets, so always leaning against the crowd is what I opt for. I do think the market has a little more legs to it, although I think the rally of the past two weeks has been ridiculous. We are going to close out the month of July this week and head into August. I don't think August will really be all that exciting. I do think that this fall is going to see some volatility come back into the markets. If you take a look at the VIX (Volatility Index), it closed at 23.09. That is the lowest close since September of 2008. There is just too much complacency from investors and traders that the economy is now on the rebound. I expect volatility to explode this fall. I think maybe the rally could last until the beginning of 2010. A lot of people try to predict market and tell you when something is going to happen. It is extremely difficult to predict the time that something is going to happen, and that isn't just for the stock market. I think that applies to everything. I think formulating a scenario (or several scenarios) about what could happen in the future by taking current events and deducing what the future trends will be is more advantageous. I think having a view (whether bullish or bearish) and then waiting for the right opportunity to trade/invest on that view will make you more successful. For example, people who are jumping up and down about the stock market's rise from the March lows proclaiming that they see "green shoots", the economic recovery is right around the corner, and the "worst is over" should not just jump in and start buying stocks recklessly. Wait for a correction to accumulate positions rather than buying stocks that are moving up fast. And for people who are stubbornly bearish who have the idea that these green shoots are weeds, the economic recovery is not going to happen, and the worst is yet to come should not start shorting or selling stocks yet until there is further evidence that the bear market rally is coming to an end. I think having a view either bullish or bearish is paramount first, but then waiting patiently to trade/invest that view will actually make you money. Look at all the bears who starting shorting in April and May, they got beat up and slaughtered in June and July. The bears might be ultimately right in the end if the market breaks the March lows and heads even lower next year, but for now they are wrong. Being right at the wrong time is still being WRONG.

What’s in the bag?

2009-07-26T07:50:00.000+01:00

Visit msnbc.com for Breaking News, World News, and News about the Economy

Quote of the Day

2009-07-24T22:52:00.006+01:00

Without the negative, we would have no capacity to differentiate the positive, so that the negative is a necessary precondition to the existence of the positive and our perception of it. So it follows absolutely that one is compelled to take a positive view of the negative. Ipso facto, the negative is positive due to its positive effect in allowing us discriminate the positive from the negative. Therefore, the negative is positive. So stop whining, shut up and think positive.
-The Sage, I. Tarius

(i.e. Prepare yourself for the worst (economically and socially), so that when it comes it will not be such a big deal or even have no efffect because you have already been preparing. In fact, making provisions should be seen as a positive by affecting your own outcome positively when the storm blows in. It's all a matter out perspective about what separates negative from positive.)

Interesting....

2009-07-24T05:55:00.000+01:00

We know where all the pain is being felt.

Americans Saving Again

2009-07-22T05:45:00.002+01:00

This post is a follow up to a previous post about Americans saving again. Here is a chart of the Americans' personal savings rate.

Propaganda & Lies

2009-07-22T01:24:00.004+01:00

I get about 10% of my news from the mainstream media. Why? Because it is all propaganda and lies. If you are trend follower like I am, then it doesn't matter what direction things are moving. I do think it is funny to hear the media talk about "green shoots" and recovery because it's just not what is happening in the majority of average americans' lives. I think this clip I just saw right now that embodies what the mainstream media has become. Wake up.

Americans Repaying Debt Most Since ‘52 Spurs Savings

2009-07-21T21:42:00.005+01:00

Found an article on Bloomberg today. Maybe now they are starting to getting the idea about debt. Here are some excerpts:

"For the first time since Harry S. Truman was in the White House, Americans are paying back their debts..."

"While the proportion of consumers without jobs rose to 9.5 percent last month, household borrowing fell to 128 percent of the average family’s after-tax income in the first quarter from a record 133 percent a year earlier"

"We’ve never seen a pullback like this....We are seeing an adjustment, and it’s very painful and there’s a lot of collateral damage."

"Corporate America is going through debt rehab,” said Lonski, who’s based in New York. “The focus right now is on improving financial health and that probably will be at the expense of capital spending and hiring activity. Nothing will discourage capital spending or encourage cutbacks in staff more than much lower-than-expected sales."

"You are not going to buy a new pair of jeans if you don’t have a job yet"

Consumers "understand what they are spending more than ever," Mike Duke, chief executive officer of Wal-Mart Stores Inc., told employees and suppliers July 16 in Bentonville, Arkansas, where the world’s largest retailer is based. "This has brought on a new normal of how consumers view consuming, shopping."

Source:
Bloomberg News
Link: http://www.bloomberg.com/apps/news?pid=20601213&sid=atjMg9ctSAMo

Obama Approval Ratings Dip?

2009-07-21T18:58:00.003+01:00

I came across an article today. The article talked about Obama's slipping approval ratings. Obama's Approval Ratings Dip? Really? Am I surprised, definitely not. I am not interested in the inner workings of politics. When politicians try to tinker in the world of finance and economics it is never a good idea. Obama was elected because the people were more concerned about the economy. If the people were more concerned with the war in Iraq and Afghanistan , John McCain would be our president today. So I am not surprised Obama's approval ratings are sliding, but my reasons have to do with social mood. I believe that social mood dictates the events in society, and not the other way around. So the fact that Obama became president at a time when society's overall mood was declining is evidence (to me) that the eventuality of his presidency will be thought of with contempt and disdain for all his actions and policies. Am I the only one who thinks what Obama has done and plans to do is completely detrimental to the US? Well, apparently not. Check out the link below. Read the article. Then take the poll at the bottom of the article. See what average Americans think about Obama's actions and policies. I think the article may not have even been giving the true feelings of people. I saw strongly disapprove of 70% on most of the poll results. You can't make this stuff up, or you could. But a poll is a poll. Nothing more, nothing less.

Source:
AOL News
Link: http://news.aol.com/article/obama-approval-ratings-dip/578736

P.S. - For more information on Obama, check out the movie, The Obama Deception.
Just watch the video below.

The Obama Deception

2009-07-21T16:34:00.006+01:00

Gerald Celente Interview 18 July 2009

2009-07-19T18:58:00.001+01:00

Weekly Wrap: Your source for stock, stock market, and stocks info

2009-07-19T07:03:00.004+01:00

Weekly Wrap: You can see that this week was a resounding attempt at reviving the continuation of the bear market rally. We had basically a three month period where the S&P essentially was flat. I had anticipated a moderate pullback because of how far and fast the market had risen from the March 6th lows, and put on a couple of short positions. A few of them got stopped out, and I covered some of the others because the market wasn't doing what it was supposed to if we were going to experience a decline. I think this week was a turning point in the this bear market rally on sentiment. A lot of well-known and staunchly bearish pundits and analysts (Nouriel Roubini and Meredith Whitney) turned quite bullish. Whitney said Goldman Sachs was a buy and Roubini predicted the end of the recession this year. I was really surprised by both of their statements, and they happened in the SAME WEEK. I respect both of their opinions, but ultimately I think they will both be wrong down the road. Just give it time. There is another thing about analysts and economists. Both have made a name for themselves (even becoming celebrities in the financial world) in the past 2 years by being bearish on companies and the economy. If the economy does have somewhat of a crack-pipe, stimulus-induced rebound because of fake money printing by the Fed and US government, they can't afford to continue to be bearish when stocks are rising and the economy gives the APPEARANCE of recovering. So, i don't blame them for turning bullish, but when the market begins to fall again. I don't think either of them will want to ingeminate their current stance when that happens. I expect a sideways to down week, next week, after a 6.97% rally for the week. Personally, I think the market move this week was rather unwarranted because the economic data isn't particularly compelling. There are some whispers that last week was options expiration and that next week the market will collapse. The idea is that the reversal to the upside this week was actually deceptive. But I heard rumors last year that the COMEX market was going to shut down because market players were going to ask for physical delivery. Didn't HAPPEN. So I tend not to put much credence to such baseless conjecture. The chart of the market will tell you everything you need to know. Look at a 5-year chart of CIT Group Inc. (CIT). All the talk this week was are they going to go bankrupt or not? Is the government going to bail them out or not? Well, it didn't start going down yesterday. It has been going down for 2 years. Bankruptcy?! Methinks, YES.

This is what i am talking about

2009-07-18T03:57:00.003+01:00

I saw this video and I had to post it. So you can really see the "recovery" mantra that is being touted by quasi-financial experts.
(By the way, Peter Schiff is one of the guys who said the bubble is going to burst before it actually did. I would love for the guy who said 4th quarter recovery on Sept. 30th to see his own video when we get there. The audacity to say that the economy is going to recover on Sept. 30th is just ludicrous.)

U.S. video game sales post largest decline since 2000

2009-07-18T03:37:00.007+01:00

Reuters reports U.S. video game sales post largest decline since 2000. Go look for yourself. Video games are supposed to be bulletproof when it comes to recessions. But what the pollyannas don't seem to realize is that this economy is in real trouble. The facts are all over the place. I get tired to trying to refute the belief that the economy is stabilizing and will start to recover later this year. These people can't keep saying later this year, or second half of '08, or the back half of the year we will experience a pickup in the economy because in just a few months we will be there.(We're in the middle of July. The meat of the second half of the year is not that far away). To me, it's obvious that the economy is sputtering downwards, but I guess not everybody can see what I see. (or want to)

Commentary: Your source for news, commentary, and stock info

2009-07-16T18:49:00.006+01:00

Stocks Comeback

In the last five days, we have seen a phenomenal comeback in stock prices. Yesterday was a tremendous short covering day. It was pretty obvious because I can only remember one day in the last 20 months like it. That day was November 13th for those that remember. It was pretty much an identical type day. Stocks opened strong and continued to move higher the entire day. I am sitting back in amazement at the apparent ability of the overall market (i.e. DJIA, S&P & NASDAQ) to magically levitate at these levels. It just doesn’t seem to want to go down, and I was one of the eager bears who were salivating at the anticipation of a moderate price decline in stocks. But this week’s market action is clearly pointing to something else. Being a trend follower means going with the direction of the market, and it is obvious by the actions of the major players in the market that the market isn’t ready to come plunging back down just yet. Maybe, we weren’t able to go down because that’s what everyone was expecting. The market has a way of doing the opposite of what the majority believes will happen. So, anticipate higher stock prices over the next several months. I am not sure how high it is going to go (obviously, no crystal ball), but I think 1000-1100 on the S&P is a reasonable estimate. At that point, I will definitely be looking to go short the market because I think people will realize by then that there will be no recovery. Stocks will have to come down to discount the highly overvalued levels.

Foreclosure Filings at Record

2009-07-16T14:34:00.000+01:00